Investigation into Amazon extended by the Federal Cartel Office

The German competition authority, the Bundeskartellamt (BKartA), has announced that it will expand its investigation into Amazon’s activities in Germany. The re-examination will take into account a reformed German competition law targeting digital giants. The research looks at pricing and the tools Amazon uses to control marketplace sellers.

Legislative reform applicable

The Bundeskartellamt has two ongoing investigations into Amazon’s activities in German e-commerce. These are now being extended because they want to include a new law for more effective oversight of e-commerce giants. As early as July of this year, the organization determined the outstanding importance of Amazon for cross-market competition. The new law thus applies to Amazon.

“Our new capabilities allow us to effectively address Amazon’s practices.”

“In both proceedings, we are examining whether and how Amazon affects the business opportunities of sellers who are active on the Amazon marketplace and compete with Amazon’s own retail business. Amazon operates the most important marketplace in e-commerce and thus has a key position in this area, which allows the company to set far-reaching competition rules on its platform,” said Andreas Mundt, President of the Bundeskartellamt. “Our new competencies, which are aimed specifically at limiting such regulatory powers, allow us to take more efficient action against Amazon’s anti-competitive practices.”

Research into price control and brand gating

The FCO will first examine the price control mechanisms of the marketplace. According to Watchdog, Amazon algorithmically controls the pricing of partner sellers in the marketplace. This makes it difficult for customers to find product offerings from these sellers.

“Amazon may have agreements with manufacturers about products sold by third parties.”

The second investigation focuses on what the watchdog refers to as brandgating, i.e. possible disadvantages for sellers in the marketplace caused by tools used by Amazon. For example, the e-commerce giant could make agreements with manufacturers on whether or not sellers can sell certain products on the marketplace.

European investigations against Amazon

It’s not the first time the online marketplace has come under scrutiny. This summer, the UK’s Competition and Markets Authority launched an investigation into Amazon’s dominance in the country. In December last year, the company was fined by the Italian market regulator AGCM for abusing its dominant position.